If you’re facing overwhelming tax debt, an offer in compromise can allow you to settle that debt for less than the full amount you owe. The IRS provides this option for taxpayers who can’t pay their tax liability in full because it could result in financial hardship. Our Tampa tax attorney explains how an offer in compromise works and how it can help you if you’re facing overwhelming tax debt.
How an Offer in Compromise Works
The IRS will consider a person’s ability to pay, income, expenses, and asset equity to determine if a person qualifies for an offer in compromise. The IRS generally approves an offer in compromise when the amount offered represents the most they can expect to collect within a reasonable period of time.
If you owe an overwhelming about of tax debt and you want to file for an offer in compromise, the first thing you should do is determine if you’re eligible. It’s important to note that the IRS will return any newly filed offer in a compromise application if you haven’t filed all required tax returns, and you haven’t made any required estimated payments. You also won’t qualify for an offer in compromise if you are in an open bankruptcy proceeding. An experienced tax attorney can help you with this process.
Submit Your Offer
If your tax attorney determined that you do qualify for an offer in compromise, they can help you submit the required forms. It is vital to fill out these forms correctly to prevent getting your offer in compromise denied.
Your Offer Will Be Accepted or Rejected
If your offer is accepted, you must meet all the offer terms, and any refunds due within the calendar year in which your offer was accepted will be applied to your tax debt. If your offer was rejected, you have 30 days to file an appeal. An experienced tax attorney should help you file an appeal to ensure that you get the best chances of getting accepted.
If you want to file an offer in compromise or if your offer in compromise has been denied, Law Offices of Darrin T. Mish, P.A. is here to help you. Contact us at (813) 295-7648 or online to schedule a consultation!